SoundExchange, which collects and distributes Internet-radio royalties, has come out swinging against the Internet Radio Equality Act, introduced Thursday (April 26) by Reps. Jay Inslee and Donald Mazullo. The bill would vacate the Copyright Royalty Board's recent hike in webcast performance royalties and set a transitional royalty rate of 7.5% of revenues for 2006-2010.
"The idea that this bill would help small webcasters or artists is ludicrous, since less than 2% of all royalty payments in 2006 came from small webcasters," said SoundExchange executive director John Simson. "The true beneficiaries are the mega-multiplex services like AOL, Yahoo!, Microsoft and Clear Channel, which will benefit from rates substantially lower than those set by the Librarian of Congress in 2002."
The Copyright Royalty Board on March 2 raised the statutory royalty to be paid by Internet radio operators to .08 cents per performance in 2006, rising to .19 cents by 2010, with a minimum annual fee of $500 per streamed channel. The increased rates are set to go into effect on May 15, retroactive to Jan. 1, 2006.
The percentage-of-revenue rate set by the Internet Radio Equality Act would also be retroactive to the beginning of 2006, and SoundExchange says that means artists will be writing checks to webcasters as they return 2006 royalties already received. According to SoundExchange, those returned royalties will constitute "a windfall of more than $50 million to mega-corporate webcasters like Clear Channel and Microsoft."
The SaveNetRadio Coalition was formed to protest the royalties hike and has already come out in support of the Internet Radio Equality Act. "Because the bill is so heavily favored to enrich the big webcasters, it raises questions as to who is really behind the SaveNetRadio Coalition," Simson said. "Although this coalition purports to be on the side of musicians, they have come out in support of this anti-artist bill."
By Brida Connolly - radioandrecords.com
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